Newsflash

+++ Approximately 4 years: that is how long BMW will keep the current X4 in production, as the second generation will be officially unveiled in the coming months. BMW of North America’s CEO, Bernhard Kuhnt, said that “this year, we will launch a new X4”. Kuhnt didn’t say much else about the X6’s smaller sibling, but we already caught a glimpse of it last year without any camo, seeing its new design that’s highlighted by new front and rear fascias, and a slightly sportier roofline. Underpinned by the CLAR architecture that’s shared with the latest X3, the new X4 will be lighter than its predecessor and will be powered by a host of petrol and diesel engines, in addition to a fully-fledged M version. BMW will start assembling the X7 at Spartanburg later this year. The flagship SUV will take on rivals such as the Mercedes-Benz GLS and the Range Rover, and will be powered by several 6 and 8 cylinder diesel and petrol engines, while a PHEV is, reportedly, also on the cards. +++

+++ CADILLAC has confirmed the XT4 will be unveiled at the New York Auto Show which kicks off on March 28th. A New York debut isn’t too surprising as the company moved their headquarters to New York City in 2015 and reports have suggested Cadillac has already begun building pre-production test models at the Fairfax Assembly Plant in Kansas City, Kansas. Cadillac hasn’t said much about the XT4 but spy photos have shown it will follow in the footsteps of the XT5 and adopt a similar front fascia. The familiar styling cues continue further back as the crossover has angular styling and vertical taillights. The model is expected to be powered by a turbocharged 2.0-liter 4 cylinder that produces around 275 hp. The engine should be paired to a 9-speed automatic transmission which can be back up by an optional all-wheel drive system. A plug-in hybrid variant has also been spied undergoing testing and it will likely be launched shortly after the standard model. +++

+++ CITROEN will launch a new large saloon to replace the C5 and C6, which will stand out from rivals by bringing “something different” to the class norm, CEO Linda Jackson has confirmed. The new car, hinted at by the C-xperience concept revealed at the 2016 Paris motor show, will launch in 2019 or 2020. “What it won’t be is a new C5”, said Jackson. “But there will be a new large saloon, because having one in the line up is a crucial part of being a big manufacturer; to be credible you need a range across small, medium and large cars, including SUVs. Do that well, and you cover the requirements of volume and profit to succeed in this business across fleet and private sales”. Jackson confirmed that much of the business case for the car was built around demand in China. While the market there has pivoted from being saloon-led to SUV-led, large saloons still command a significant number of sales and provide strong profit margins. Last year, Citroen sales in China fell 47.3% as a result of the shift to SUVs and the growing competition from local car makers, a problem Jackson has sought to address by launching the C5 Aircross there. “For all the change, China is still our second largest market, and saloons are still a significant part of that market”, said Jackson. Confirming that the C-xperience hinted at the saloon, Jackson added: “Like all concept cars, it was made to test reaction, and the car will evolve. But, and I know I’m biased, I loved it. It will inspire the production car and it gave a view of a luxury flagship without any of the traditional cues of chrome, leather or lacquered wood. It had an air of the slightly avante garde that will make it to production. It can also be the showcase for our ideal of redefining comfort, in terms of the interior and the ride and handling balance using our new Advanced Comfort suspension”. When it was revealed, the C-xperience was originally touted as a non-specific concept looking at future design directions the firm could take. The DS 5 was the largest car in Citroën’s portfolio prior to its separation from the luxury brand, although a version of the C6 is still sold in China. At 4.85 metres long, the C-xperience is a similar length to the last C6. Its low height (1.37 metres), long wheelbase (3.0 metres) and swooping roofline may have been designed more for dramatic effect, but they were also interpreted as a sign of the Citroën design team’s determination to continue the left-field design strategy kick-started with the C4 Cactus in 2014. By comparison, a Ford Mondeo is 4.87 metres long and 1.5 metres tall and has a wheelbase of 2.8 metres. However, Citroën insiders hope that it can stand out from established class leaders such as the Mondeo and Volkswagen Passat by invoking a more grown-up version of the design flair that has proved so successful on the C4 Cactus, C3, C3 Aircross and C5 Aircross. It was also no coincidence that the C-xperience name referenced the CX, which was built between 1974 and 1991, winning the European Car of the Year trophy in 1975 and scooping more than 1.2 million sales during its lifetime. The CX was notable for (and named after) an aerodynamic profile that bucked convention and set new trends when it was originally launched. The new C5 and C6 would benefit not just from striking exterior design but would also get a similarly uncluttered dashboard, large touchscreen and lounge-like chairs in the front and rear. “Our core message is ‘Be different, feel good’, and every car we build will embody that philosophy”, said Jackson. Citroën’s Advanced Comfort programme will be key, too. Although this is expected to be introduced before the new saloons arrive, its basic tenet of using an all-new suspension system to put ride comfort at the heart of the car’s make-up, while also filtering out external noise and vibration, brings Citroën back to its historical core strength of creating visually arresting cars that prioritise comfort. Potentially, it also gives Citroën a technological edge over its rivals, underpinning another core brand value established under Jackson’s leadership of offering cutting-edge technology. “We have the history and the DNA to build unique and rewarding cars”, said Jackson. “We want Citroën to be an attractive, aspirational and iconic brand, whichever segment it is operating in”. Underlining the key role new markets will play in determining the success of the new large saloon are the C5s sales figures in Europe: it sold 145,000 units in Europe in 2002 but just 14,000 last year. The C6, meanwhile, peaked at 7,000 units in Europe in 2007 but sold fewer than 1,000 units by the time it was killed off in 2012. +++

+++ An anticipated shift to 40 percent ELECTRIC cars on German roads by 2035 could be absorbed by the power system and generate additional income for utility companies, an independent study by Aurora Energy Research said. It calculated this will result in 31 terawatt hours (TWh) of additional power demand by 2035; at 5 percent of the current annual consumption a manageable number, given that renewable generation units are expanding. “E-mobility will be the more economic choice by then and its impact on the German power market will tend to be moderate”, said Benjamin Merle, one of the authors. “We don’t see any threat of significant price increases for households or industry”, he said. Europe’s biggest economy had roughly 46 million small passenger cars on the road on Jan. 1, 2017 when only 0.1 percent of them were powered by electricity, official figures showed. However, around 10 percent of cars get replaced each year and Aurora’s Berlin office, the German arm of an Oxford-based parent company, assumes that falling battery costs and a far better climate record of electric cars versus the combustion engine will start supporting mass adoption in the next decade. Battery-powered cars should emit 40 percent less carbon dioxide in 2035 than those with traditional engines, it said. This assumes that the carbon efficiency of the latter will not be improved from today as less research goes into the old technology. Higher battery density will ensure that driving ranges expand due to more powerful batteries while charging infrastructures are built up to meet demand, it also assumed. It estimated that exchange-quoted power prices for the day-ahead will nearly double to an average around the mid-60 euros a megawatt hour by 2035, as Germany is to phase out cheap nuclear and much coal-fired capacity by then. Within that price, the additional costs required to meet the 31 TWh were estimated at 2.7 euros/MWh, Merle said. German utility companies stand to gain between 500 and 700 million euros a year in additional earnings before interest and taxes (EBIT), if they exploit cross-selling opportunities with start-ups in the chargepoint sector that are springing up fast, the researchers estimated. These could include offering consumers time-of-use tariffs to charge cheaply at night-time or using electric vehicles as interim storage for inexpensive power, to release it at high-price times, they said. +++

+++ Elon Musk has made audacious claims about the next-generation Roadster but Fiat Chrysler Automobiles (FCA) boss Sergio Marchionne isn’t worried. In fact, he believes FERRARI can create an even more remarkable electric supercar. Marchionne divulged details about Ferrari’s new-found willingness to venture into the all-electric vehicle realm, revealing that FCA’s hand has been forced by Tesla, Bloomberg reports. “If there is an electric supercar to be built, then Ferrari will be the first. People are amazed at what Tesla did with a supercar: I’m not trying to minimize what Elon did but I think it’s doable by all of us. We do it because we have to do it”, Marchionne said of the electric Ferrari supercar. However, an EV from Ferrari is still many years away. In the meantime, the Italian manufacturer will start producing a greater number of hybrid vehicles, before transitioning to electric propulsion. Marchionne’s openness to an electric Ferrari supercar is a remarkable about-face for the outspoken executive who previously shot down the possibility of such a vehicle. What’s more, he denied the possibility of Ferrari ever producing an SUV but lo and behold, such a vehicle is edging closer to the market. In the first half of this year, Marchionne will reveal a new strategy plan for Ferrari, one of his final acts as Ferrari boss before he leaves his FCA post in 2019. +++

+++ FORD estimated financial results for 2017 and 2018 that fell short of investor expectations, in a downbeat forecast that contrasted with a more positive outlook from rival automaker General Motors. Ford Chief Financial Officer Bob Shanks told that higher costs for steel, aluminum and other metals, as well as currency volatility, could cost the company $1.6 billion in 2018. Cost-cutting actions are under way and will have the biggest impact “in 2020 and later”, Shanks said. “We are not satisfied by our performance”, he said. “We are excited about our future”. Ford’s president of global markets, Jim Farley, said the company’s business structure was “out of sync with our revenue”, and vowed to cut costs by sharply reducing the variants of high-volume Ford models and slashing marketing costs by $200 million a year. Farley hinted at possible significant changes in the structure of Ford’s money-losing South American business. “We are exploring every option you can imagine”, Farley told. To boost revenue, Farley said Ford would decrease its passenger-car models and develop more pick-ups and SUVs aiming at profitable niches such as rugged off-road models. In May, Ford’s board ousted Chief Executive Mark Fields and named Jim Hackett, who was known as a turnaround expert and had been leading Ford’s unit developing self-driving vehicles, to replace him. Hackett has promised to slash Ford’s product development costs by $14 billion and has launched reviews of the vehicle lineup. Ford’s forecast reinforces Hackett’s warning to investors last fall that the cost-cutting and product strategy changes could take time. In a nod to the importance investors are placing on alternatives to traditional auto manufacturing, Ford said it would start reporting separately the results of its investments in “mobility” businesses, such as self-driving delivery vehicles and ride services, and previewed a loss for those operations of $300 million for 2017. Shanks said Ford’s mobility services business is a separate legal entity and reporting results gives the automaker “options down the road”. Some analysts have advocated that Ford create a separate class of shares to allow investors to put money into a technology-focused growth business. Ford’s highly profitable F-series large pickup franchise will face aggressive challenges from General Motors and Fiat Chrysler Automobiles, as those rivals crank up their own respective production of new generations of large pickups. GM’s new Chevrolet Silverado and Fiat Chrysler’s 2019 Ram are both designed to chop at the F-series’ lead as the best-selling vehicle line in the United States. +++

+++ Differing outlooks for 2018 from GENERAL MOTORS (GM) and Ford highlighted how the 2 largest U.S. automakers have been on diverging roads for the past year. GM Chief Executive Mary Barra has led a dramatic overhaul of the No. 1 U.S. automaker, selling its unprofitable European operations, exiting troubled Asian markets and giving the green light to investments in self-driving vehicles and an expanded portfolio of electric vehicles. GM projected 2018 results in line with the $6.00 to $6.50 a share adjusted earnings forecast for 2017, and promised higher profit in 2019. GM shares are up 18 percent from a year ago. Ford shares are up only about 4 percent from a year ago.

+++ HYUNDAI pledged to hire about 45,000 people over the next 5 years amid an emphasis on jobs by the government, but analysts doubted if the conglomerate would meet the goal as it was eyeing cost cuts to counter sluggish sales. South Korea’s finance ministry announced Hyundai Motor Group’s plan for hiring and investing about 23 trillion won ($21.56 billion) over 5 years after Finance Minister Kim Dong-yeon visited the group’s lab earlier. The ministry said the investment will be in areas such as electric cars and self-driving automobiles, but analysts said the sum was not a surprise as Hyundai Motor already spends 4-5 trillion won annually as capital expenditure and has previously indicated it will invest in those areas. A Hyundai spokeswoman confirmed the hiring plan but did not comment on the investment sum. She said the finance ministry’s statement was discussed with the company beforehand. Neither the ministry nor Hyundai provided details on the hiring. The hiring announcement could be politically driven and seemed unrealistic, some analysts said. Hyundai had 68,194 employees and Kia had 34,752 as of end-September, according to the companies. President Moon Jae-in’s administration, which is less than a year old, has stressed jobs creation and vowed to take a close look at Hyundai’s holding structure. “It could be a gesture to the administration”, said Kim Yeon-woo, analyst at Hanyang Securities. “Hyundai is in the process of limiting overtime and other ways to cut personnel costs, I don’t think they are in the position to hire more people”, Kim said. In August, a Seoul court ordered Kia to pay about 420 billion won in unpaid wages, ruling in favor of workers in a landmark labor dispute which added to personnel costs. Business groups representing the country’s large companies said in May they would work with the government to create jobs and boost investment after President Moon took power vowing to reform the family-run conglomerates that dominate the economy. The country’s current antitrust chief told last year that he had been in talks with Hyundai over its web of cross shareholdings among its group affiliates that resulted in a big governance risk. Hyundai has been increasingly foraying into newer growth areas after its sales slumped last year due to an inadequate product line-up in the United States and diplomatic tensions with China. Besides electric and self-driving cars, the planned investment will also be in fields such as artificial intelligence, batteries and hydrogen energy, as well as start-ups, the ministry said. “Global trends are changing fast”, Hyundai vice chairman Chung Eui-sun said, according to the statement. “We will recruit better, top-level talent in these new businesses and develop them going forward”. Hyundai said earlier this month it had invested in Southeast Asian ride-hailing firm Grab, as it seeks to expand into the region to reduce its reliance on China. +++

+++ To further differentiate itself from Nissan, luxury brand INFINITI will aggressively adopt electrification, Nissan chief executive Hiroto Saikawa has revealed. Speaking shortly after the launch of the stunning Infiniti Q Inspiration Concept, Saikawa said that all Infiniti models from 2021 will be electrified, with the exception of large SUVs. “We are now trying to make Infiniti the premium brand and highly electrified brand”, he said. Infiniti’s electrification plan will consist of a 2-prong approach. All of the brand’s future vehicles will either be all-electric or instead use a small petrol engine that powers a vehicle’s generator, rather than propelling the vehicle itself. According to Saikawa, half of all Infiniti models sold on the roads will have electrification by 2025. In the meantime, Infiniti is also looking to develop the internal combustion engine of the future, recently unveiling its VC Turbo engine that features a world first variable-compression system, providing the petrol unit with torque and efficiency to rival a hybrid of diesel vehicle. The engine recently premiered in the new QX50. As for the stunning Q Inspiration Concept from Detroit, the brand says it “previews something that could appeal to a younger audience, who seek modern design and new technologies to inspire and empower them”. It remains unclear if a production version is in the works. +++

+++ It was once inconceivable that brands such as Porsche, Lamborghini, and Ferrari would ever introduce a SUV but all of them either has a model in showrooms or one on the way. Even Lotus, the brand of “simplify then add lightness”, is plotting a SUV of its own. The logic behind them is sound, as they basically print money, but MCLAREN isn’t planning to follow suit. Of the 12 models on the horizon, none of them will battle the Lamborghini Urus. McLaren chief designer Dan Parry-Williams said “I’m not the first person to point out an SUV is neither particularly sporty or utilitarian”. He went on to say SUVs don’t fit the company’s philosophy of “everything for a reason” unless “the reason is to clutter up the streets”. Thankfully McLaren isn’t faced with the pressure to build a SUV as the company posted record sales last year. 3,340 McLaren models were sold in 2017 and a bulk of them were from the Sport Series lineup which includes the 570S and 570GT. While we shouldn’t expect to see a McLaren SUV, McLaren CEO Mike Flewitt recently said we can expect lighter models as well more vehicles with hybrid powertrains. +++

+++ MERCEDES-AMG is considering the addition of all-electric models to its sub-brand, despite the in-house tuning division long time devotion to thunderous V8s. “Are we going to see all-electric AMGs?” said Mercedes R&D boss Ola Kallenius, “Why not? It is not a concrete programme at the moment, but it is conceivable. Besides we have been there before”. Kallenius is referring to the SLS Electric Drive project that saw a tiny number of all electric SLS supercars built for specific customers. Asked what customers would think of an AMG without its trademark V8 soundtrack Kallenius observed: “When we went to turbocharged engines everyone thought that would be the end of the AMG character, but we don’t exactly get many complaints about that any more. We all love the sound of the V8 and an electric car can still be thrilling, so we are going to have to develop a second love for that”. In the meantime Mercedes-AMG is busy preparing its first ‘power-hybrids’, a genre of powertrain Kallenius describes as “using its battery power more for boost than for range”. The new system is known to have been fitted to AMG’s extant 4.0-litre V8 which is already capable of developing 612 hp without any electrical assistance. Porsche’s equivalent system boosts the output of its 4.0-litre V8 from 550 hp to 680 hp, it seems likely AMG wants to go further still, all the way to 816 hp, making them the most powerful Mercedes-Benz cars to go into production, at least until the Project One hypercar hits the streets in 2020. Kallenius also confirmed that the new 3.0-litre straight six mild hybrid ‘53’ series engine launched at the Detroit show in both the CLS coupe and E-class saloon will eventually replace entirely the ‘43’ series of 3.5-litre V6 motors despite the latter’s resounding success in the marketplace. The new engine features a conventional turbocharger an electric compressor charger plus a 48 Volt system powered by combined starter and alternator contained within an electric motor located between the engine and the gearbox. “It offers us better performance, CO2 emissions and incredibly smooth start up characteristics”, Kallenius explained. The new engine is part of the OM654 family that includes both the 6 cylinder diesel already seen in the S-class and the 2.0-litre four cylinder diesel now replacing the 2.1-litre unit that has served for years as Mercedes’ staple diesel unit. +++

+++ TESLA intends to improve the voice command functionality of the entry-level Model 3 in an effort to make the sedan even more straightforward to use. When quizzed about when the electric carmaker would provide the Model 3 with greater voice control functions, Musk said users will eventually be able to control almost any vehicle function with a voice command. “You will be able to do pretty much anything via voice command. Software team is focused on core Model 3 functionality right now, but that will be done soon, then we will add a lot more features”, Musk said. Like the Model S and Model X, as well as an increasing number of vehicles on the market, most of the Model 3’s functions are controlled from a large touchscreen display. The lack of physical buttons forces users to momentarily take their eyes off the road, making voice commands especially important for vehicles like these. Beyond the new voice commands, Tesla is working on a “major navigation overhaul”, set to be launched early this year. Musk recently revealed that the new navigation system “will be light-years ahead of current system” and that it is being rigorously tested before being introduced. +++